Many European countries have been investing in offshore wind energy (OWE) for the past decades in order to contribute to their climate targets, achieve energy security, and promote regional economic development. More recently, considerable progress, both technical and economic, allowed technology to mature and spread. OWE is seen by many as a promising renewable energy source that has the potential to occupy a considerable part of the future European energy mix.

Rapid technological progress is the result of knowledge exchanges, establishment of partnerships, and collaborative work towards reducing risks. To enable expansion of the industry, WindEurope and RenewableUK organized Offshore Wind Energy 2017, the world’s largest OWE exhibition and conference, in London this last June. Nearly 6,300 participants from 50 countries attended, including representatives of the Baltic InteGrid project, namely the Institute for Energy, Climate Protection, and Mobility (IKEM) and Aalto University. The IKEM-team was there mainly to take the pulse of the industry and conduct interviews with industry experts for the market and supply chain analysis of the Baltic InteGrid project. Aalto University has presented their findings with regard to Maritime Spatial Planning in the Baltic Sea region and its impact on the development of offshore wind power projects.

Through interviews and exchanges with various suppliers and other stakeholders of the offshore wind industry, a general positive outlook on the sector emerged. The offshore wind industry is blossoming and experienced considerable growth within the last decade. Technological innovations as well as optimization of both manufacturing and installation processes contributed to cost reductions and prosperity of the industry. Further cost reductions are expected, mainly achieved via optimization of installation as well as Operation and Maintenance (O&M) activities. Cost abatement achieved through increased capacities, experience building, a tendency for consolidation, and a desire for standardization have allowed for significant reduction in offshore wind subsidies, with the first zero-subsidy bid submitted by DONG energy in Germany.

Although offshore wind energy is becoming increasingly competitive, some participants at the fair expressed their concerns for the industry. Acknowledging recent progress and the likely continuation of current expansion until mid-2020, they stressed that further developments remain uncertain beyond this point in time. This is mainly due to hesitation and the lack of commitment of certain governments towards the OWE industry. Indeed, providing a long-term policy framework that supports offshore wind development through the reinforcement and harmonization of climate, energy, and industry policies is crucial for expansion. Some countries such as the United Kingdom, Denmark or Germany have allowed technology nurturing by providing various policy instruments, making them industry leaders, but some suppliers remain concerned about how these supports schemes will evolve with time. For example, the effects on financing of the transition from the renewable obligations to feed-in-tarifs (FiT) and contracts for difference in the UK are still unclear. Similar dubiousness is associated to the change from FiT to auctioning in Germany. A stable, long-term political framework is necessary to continue to attract investment and financing in the offshore wind industry due to its highly capital-intensive nature. This framework should be embedded in and aligned with clear climate policy and renewable energy goals. It was observed in London that industry participants recognize the great role certain governments occupied in driving the development of offshore wind energy in Europe, but the recent changes and lack of renewable energy goals in the longer term might create future setbacks for the industry.

Developments in the OWE sector in Europe have allowed to bring this technology from a state of R&D or demonstration to early-commercialization. The move towards large-scale diffusion will require considerable investments. Governments have so far facilitated financing through various policy instruments, but recent policies changes generated uncertainty for certain suppliers. A stable policy framework with clear targets for offshore wind energy is necessary to keep the industry’s competitive momentum, and take its rightful place in the sustainable, diversified energy mix Europe aims to achieve.